Important changes in the real estate market in the first quarter: some leading property developers and institutions say the industry's toughest period has passed.

In the first quarter of this year, there was an important shift in the real estate market.

In the 2026 Government Work Report, the wording of the targets for real estate work was adjusted: the description for 2025 of “continuously making efforts to stabilize and reverse the downward trend in the real estate market” was changed to “focusing on stabilizing the real estate market.”

Meanwhile, multiple departments including the Ministry of Housing and Urban-Rural Development, the National Financial Regulatory Administration, the Ministry of Finance, and others have spoken out frequently. The city-level real estate financing coordination mechanisms have been operating on a regular basis. Efforts to use special-purpose government bonds to acquire and reserve existing land and unsold housing have been stepped up. Supporting policies for urban renewal have been accelerating in their implementation.

On January 15, 2026, the National Financial Regulatory Administration pointed out at the 2026 regulatory work meeting that it should promote the normalization of the city-level real estate financing coordination mechanism. On March 17, the Ministry of Finance, in its “Report on the Implementation of China’s Fiscal Policies in 2025,” mentioned that it would implement effective policies such as those supporting the acquisition of existing commodity housing with special-purpose government bonds for use as affordable housing, among others.

Based on this, some leading real estate developers and institutions believe that the most difficult period for the industry has passed. The industry will enter a cycle of bottoming out and rebound, with deep differentiation. Core cities and high-quality segments are expected to kick off their recovery first.

“Basically, real estate policies have been rolled out as much as possible. Next is to plug gaps and check whether there are any ‘last-mile’ issues in the implementation of earlier policies.” On March 31, Li Yujia, chief researcher at the Guangdong Housing Policy Research Center, told reporters from the “Economic Information Daily” that the most effective real estate policy at present is to focus on economic fundamentals such as new-type urbanization, localizing new urban residents, and stabilizing employment for residents.

Special-purpose government bonds become an important tool

In the first quarter of 2026, the real estate financing environment remained continuously loose. The city-level real estate financing coordination mechanism officially entered a stage of regularized operation. On January 15, at the annual regulatory work meeting, the National Financial Regulatory Administration made it clear that it would promote the regularization of this mechanism to help build a new model for real estate development.

On January 21, Ni Hong, Minister of Housing and Urban-Rural Development, said in a media interview that this year will focus on stabilizing the real estate market, give full play to the role of the real estate financing “white list” system, support real estate firms’ reasonable financing needs, and implement a lead bank system for real estate financing.

On March 16, at an expanded meeting of the Party committee of the National Financial Regulatory Administration, it further proposed that the role of the “guaranteed delivery of completed homes (baojiaofang)” white list system should be leveraged to speed up the establishment of financing systems that are compatible with the new model of real estate development.

“The regularization of the white list system is an important improvement to the real estate financing coordination mechanism.” Liu Shui, head of the research and business department at the China Index Academy, said that this mechanism will effectively enhance financial institutions’ confidence in real estate firms, and it also shows that the “white list” support for real estate firms’ financing policies is shifting from short-term liquidity relief to long-term guarantees.

In terms of risk prevention, special-purpose government bonds have become an important tool for destocking and resolving risks. The “Report on the Implementation of China’s Fiscal Policies in 2025” released by the Ministry of Finance on March 17 proposed that, in 2026, the government should steadily advance urban renewal. Implement policies that use special-purpose government bonds to support the acquisition of existing commodity housing for use as affordable housing, among others. Implement and improve regional fiscal policies to enhance the coordination of regional development.

Yanzhuojin, vice president of Shanghai E-House Real Estate Research Institute, analyzed that when special-purpose government bonds are used to acquire and reserve existing land and commodity housing, it achieves three benefits at once. It not only opens up large-scale channels for real estate firms to reduce inventory and alleviates liquidity pressure, but also replenishes sources of affordable housing at low cost. At the same time, it can optimize the relationship between supply and demand in the market and stabilize expectations.

Another important initiative on the financing side is the optimization of loan policies for commercial property purchases. At the beginning of 2026, the PBOC and the National Financial Regulatory Administration lowered the down payment ratio for commercial property purchase loans nationwide to 30%. Cities such as Shanghai and Guangdong quickly followed to implement the policy. Beijing, Qinghai, and other places further emphasized activating stock commercial facilities: Beijing allows land-use purposes such as commercial, business finance, and entertainment/sports/fitness to be converted into each other; Qinghai activates existing commercial facilities through building function conversions and mixed-use approaches, providing more pathways for destocking commercial-office inventory.

The China Index Academy pointed out that increasing support for commercial-office properties reflects a concrete effort to destock the commercial-office market and also shows that regulators’ attention to destocking commercial-office projects is increasing. In recent years, many cities have already introduced multiple supporting policies, including converting existing commercial-office projects into rental housing, supporting building compatibility, and temporarily changing uses, among others.

“The bottom of the real estate market is becoming clearer”

Reporters from the “Economic Information Daily” noted that in the first quarter of 2026, there was an important shift in real estate market policies—greater focus on activating and utilizing existing inventory.

This shift is clearly reflected in the National Two Sessions and the “15th Five-Year Plan” outline. This year’s Government Work Report changed the real estate policy target from “continuously making efforts to stabilize and reverse the downward trend in the real estate market” in 2025 to “focusing on stabilizing the real estate market,” and for the first time proposed a three-in-one approach: “tailored policies by city to control incremental growth, destocking, and improving supply.” After 10 years, “destocking” has been brought up again.

The “15th Five-Year Plan” outline lists “promoting high-quality development of the real estate sector” as a standalone chapter, divided into two sub-sections: “improving the housing security system” and “promoting the steady and healthy development of the real estate market,” along with adding multiple actionable measures.

On the front of activating existing inventory, cities have stepped up efforts to acquire and reserve existing land at an unprecedented pace.

According to incomplete statistics from the China Index Academy, as of March 29, across the country, more than 5,800 plots of idle land are planned to be acquired using special-purpose government bonds, with a total land-use area exceeding 300 million square meters and a total amount exceeding 780 billion yuan. More than 350 billion yuan of special-purpose government bonds have already been issued, accounting for about 45%. Among them, in 2026, Guangdong, Jiangsu, Sichuan, and other places issued more than 48 billion yuan, maintaining a relatively strong issuance pace.

Accelerating the rollout of supporting policies for urban renewal became another highlight in the first quarter of 2026.

On February 1, the Fujian Provincial Department of Housing and Urban-Rural Development issued the “Several Opinions on Further Promoting the Stability of the Real Estate Market” (Min Jian Fang〔2026〕1). It clarified support for old and dilapidated housing to be “dismantled and rebuilt by the owners themselves.”

On February 27, Shenzhen issued a notice clarifying that for newly launched old-ristrict renovation projects, it will generally no longer require compulsory construction of affordable housing, lowering the development threshold for enterprises.

On March 5, Qinghai issued the “Implementation Plan for Urban Renewal Action in Qinghai Province,” clarifying targets for 2030: to carry out renewal and redevelopment for more than 8 old residential areas, complete renovation for 150,000 households, and fully eliminate Category D dangerous buildings.

Policies on the demand side have become even more refined. This year’s Government Work Report proposes “strengthening housing security for families in their first marriage and first childbirth, and supporting improved housing demand for families with multiple children,” tightly combining housing policy with population policy. Many regions have optimized provident fund policies by expanding their scope of use and supporting inter-city mutual recognition and cross-region lending. Support for purchase subsidies for specific groups has been increased.

On March 30, at an interview with reporters including those from the “Economic Information Daily,” the management of China Resources Land said that the industry’s most difficult period has already passed, and it has formally entered a cycle of building a base, rebounding, and deep differentiation. On the policy front, the current policy intensity is “relatively moderate,” and there is still considerable room for further efforts in the future.

In a research report, Huatai Securities stated that “the bottom of the real estate market is gradually becoming visible.” Its core argument is: used-home sales are entering the strongest “small spring” in three years, and the industry is moving into a stage of finding a bottom and stabilizing.

Cao Jingjing, general manager of the index research department at the China Index Academy, analyzed that “tailored policies by city” is still the main policy line at present. She expects housing policy to be better integrated with population policy, strengthening support for housing for families in their first marriage and first childbirth and for families with multiple children. “In the first quarter of 2026, the real estate market in core cities has shown a pattern of point-by-point repair. The performance of the second-hand housing market is stronger than that of the new home market. In the second quarter, it is expected that the repair trend will continue, driven by the peak season and good homes coming onto the market. For the whole year, the market is still in a stage of building a base.” Cao said.